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"Share" in the Capital of the Company

Startupr
30 September, 2015

Hong Kong Companies Ordinance defines a share as the interest of the shareholder in a company expressed in monetary terms. It's basically a percentage of the capital of the company. The ownership of the share carries obligations as well as rights. Shares di bit gave nominal value

Law: sec 135, Hong Kong Companies Ordinance


Classes of shares
There may be several types of shares. It varies in rights attached to each type of share (for example voting rights)

  • Ordinary/Equity Shares – give shareholders control over the company
  • Preference Shares – give preferential rights to shareholders to
    • A fixed and cumulative dividend
    • A return of capital
  • No preference Shares – the company also may issue no preference shares
    • Cumulative Preference Shares – cumulative preference shares give the holder a dividend at a fixed rate throughout the life of the company
    • Non-cumulative Preference Shares – if the non-cumulative preference shares are issued, dividends need only be paid in the years when the company has profits and is able to pay the dividends at the fixed rate
    • Redeemable Preference Share – give shareholders the right to either be repaid their capital or the company the right to repay the capital
    • Convertible Preference Share – may be converted to any other class of share
  • Employee's Shares – issued as an incentive to employees
  • Management Shares – issued in limited numbers to founders. Management shares usually have big voting rights


Shareholder vs. Member

There two terms often used interchangeably, however they may not have the same meaning.
A member isn't necessarily a shareholder (the company has no share capital) or vice versa a shareholder isn't necessarily a member.



About the Author


Startupr

Startupr puts you first. This is why our main focus is Startups with global ambitions. We give you the freedom to build your business while we take care of the tedious, administrative tasks, leaving you to concentrate on your dream for your company. As part of our brilliant service, our back end software will automatically send you reminders of important annual filings, and upload your important document to your online account. startupr.hk

 

 

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